New York Law Review

Tag: eminent domain

  • Corsello v. Verizon New York, Inc., 18 N.Y.3d 777 (2012): Inverse Condemnation and Statute of Limitations

    Corsello v. Verizon New York, Inc., 18 N.Y.3d 777 (2012)

    A property owner can bring an inverse condemnation claim against an entity with eminent domain power for a permanent physical occupation of their property, and a statute barring claims related to attachments of wires or cables to a building precludes a statute of limitations defense.

    Summary

    The Corsellos sued Verizon for attaching a terminal box to their apartment building without compensation, enabling Verizon to provide phone service to other buildings. The Corsellos claimed inverse condemnation, unjust enrichment, trespass, and deceptive trade practices. The New York Court of Appeals held that the Corsellos stated a valid inverse condemnation claim, which was not time-barred due to Real Property Law § 261. However, the Court found the General Business Law § 349 claim time-barred and the unjust enrichment claim legally insufficient. The Court also upheld the denial of class certification, finding that individual issues predominated.

    Facts

    The Corsellos owned an apartment building in Brooklyn. Verizon’s predecessor attached a terminal box to the building, which connected Verizon’s “Block Cable” to “Station Connection wires,” providing telephone service to multiple buildings, not just the Corsellos’. The Corsellos alleged that Verizon never disclosed their right to compensation and falsely implied it had a right to attach the box. A Verizon representative allegedly told William Corsello in 1986 that Verizon “had a right” to put the box on the wall.

    Procedural History

    The Corsellos sued Verizon, seeking damages and injunctive relief on behalf of themselves and similarly situated building owners. The Supreme Court dismissed the unjust enrichment claim but upheld the other claims. It later denied class certification. The Appellate Division modified the Supreme Court’s order, dismissing the inverse condemnation claim as time-barred, reinstating the unjust enrichment claim, and affirming the General Business Law claim. It also affirmed the denial of class certification. The Court of Appeals modified the Appellate Division’s order, reinstating the inverse condemnation claim but dismissing the other two claims. It affirmed the denial of class certification.

    Issue(s)

    1. Whether the attachment of a telecommunications box to a building constitutes a taking for which an inverse condemnation claim may be brought.

    2. Whether Real Property Law § 261 saves the inverse condemnation claim from being time-barred.

    3. Whether the claim under General Business Law § 349 is barred by the statute of limitations.

    4. Whether the plaintiffs stated a valid claim for unjust enrichment.

    5. Whether the lower courts abused their discretion in denying class certification.

    Holding

    1. Yes, because the complaint alleges facts from which a continuous and permanent occupation of the plaintiff’s property—a de facto taking—could be found.

    2. Yes, because Real Property Law § 261 precludes a statute of limitations defense based on the attachment of wires or cables to a building.

    3. Yes, because the alleged deception occurred more than three years before the suit was brought, and no subsequent deceptive act was alleged to justify equitable estoppel.

    4. No, because an unjust enrichment claim is not available where it duplicates or replaces a conventional tort claim.

    5. No, because the courts were justified in finding that common questions of law or fact did not predominate and that the claims of the representative parties were not typical of the class.

    Court’s Reasoning

    The Court reasoned that inverse condemnation is a means for a landowner to recover just compensation when their property has been taken without formal condemnation proceedings. The Court rejected Verizon’s argument that inverse condemnation is only available when an entity chooses to exercise its eminent domain power. The Court clarified that a continuous, permanent trespass could constitute a de facto taking. Regarding the statute of limitations, the Court held that Real Property Law § 261 prevents a lapse-of-time defense. It emphasized that the statute aims to protect property owners from losing remedies due to the passage of time when a company unlawfully attaches wires or cables to their property. The Court determined that the General Business Law claim was time-barred because the injury occurred when the plaintiffs refrained from demanding payment or removal of the box, which was more than three years before the suit. The Court stated that the unjust enrichment claim was duplicative of the trespass and taking claims. Lastly, the Court found no abuse of discretion in denying class certification. Evidence submitted by Verizon cast doubt on the existence of a uniform policy of attaching apparatus to buildings furtively and without consent. Verizon presented evidence specific to the plaintiffs’ building, suggesting that individual issues predominated over common ones. The Court quoted United States v. Clarke, 445 U.S. 253, 257 (1980) in defining inverse condemnation as “the manner in which a landowner recovers just compensation for a taking of his property when condemnation proceedings have not been instituted.”

  • Kaur v. New York State Urban Development Corp., 15 N.Y.3d 235 (2010): UDC Act’s Blight and Civic Project Determinations

    15 N.Y.3d 235 (2010)

    The Empire State Development Corporation’s (ESDC) findings of blight and determination that the condemnation of petitioners’ property qualified as a “land use improvement project” or, alternatively, a “civic project” under the New York State Urban Development Corporation Act (UDC Act) are entitled to deference if rationally based.

    Summary

    This case concerns the legality of the Empire State Development Corporation’s (ESDC) use of eminent domain to acquire private property for Columbia University’s expansion in West Harlem. The New York Court of Appeals held that ESDC’s determination that the area was blighted and the project served a public purpose as a “land use improvement project” and as a “civic project” under the UDC Act was rationally based and entitled to deference. The Court emphasized the limited role of the judiciary in reviewing blight determinations and rejected claims of bad faith and procedural due process violations.

    Facts

    Parminder Kaur and others owned commercial properties in West Harlem. The ESDC sought to condemn these properties for Columbia University’s expansion project, which included constructing new buildings, creating open spaces, and improving infrastructure. The ESDC based its decision on studies indicating blight and the project’s potential public benefits. Columbia University would exclusively underwrite the costs of the project and not seek financial assistance from the government. Various business groups sought documents related to the project and filed CPLR article 78 petitions.

    Procedural History

    The Supreme Court ordered the release of certain documents. The Appellate Division affirmed this order, questioning the relationship between ESDC and its consultant. The New York Court of Appeals affirmed the Appellate Division’s order regarding document disclosure. The Appellate Division initially ruled against ESDC on the public use issue, but the Court of Appeals reversed, upholding ESDC’s determination.

    Issue(s)

    1. Whether ESDC’s exercise of eminent domain to acquire the petitioners’ property for the development of a new Columbia University campus was supported by a sufficient public use, benefit, or purpose as a land use improvement project?
    2. Whether ESDC’s exercise of eminent domain to acquire the petitioners’ property for the development of a new Columbia University campus was supported by a sufficient public use, benefit, or purpose as a civic project?
    3. Whether the statutory term “substandard or insanitary area” is void for vagueness?
    4. Whether the petitioners were denied procedural due process?

    Holding

    1. Yes, because ESDC’s finding of blight was rationally based and thus the project qualified as a “land use improvement project.”
    2. Yes, because ESDC’s determination that the project qualified as a “civic project” was also rationally based.
    3. No, because the UDC Act provides adequate meaning to the term “substandard or insanitary area.”
    4. No, because petitioners had a meaningful opportunity to be heard and were not prejudiced by any alleged FOIL violation.

    Court’s Reasoning

    The Court of Appeals emphasized that the judiciary’s role in reviewing blight findings is limited, deferring to the legislature’s and administrative agencies’ determinations unless there is no room for reasonable difference of opinion. The Court cited Matter of Goldstein v. New York State Urban Dev. Corp., 13 NY3d 511 (2009), reaffirming that removing urban blight is a constitutionally sanctioned predicate for eminent domain. The Court found that ESDC considered a wide range of factors to find blight and that the Appellate Division improperly conducted a de novo review.

    The Court rejected the argument that ESDC acted in bad faith by hiring AKRF, noting that a second consultant, Earth Tech, reached similar conclusions. The Court also found the project qualified as a “civic project” because it would provide educational facilities and other public benefits. The Court stated, “[t]he advancement of higher education is the quintessential example of a ‘civic purpose’.”

    The Court also rejected the argument that petitioners were denied procedural due process, emphasizing they had access to documents and a meaningful opportunity to comment on the project. The Court held that even if there was a FOIL violation, it did not rise to the level of a due process violation because the petitioners were not prejudiced. “To establish that a FOIL violation rose to the level of a due process violation, petitioners ‘must show that the withholding of the [documents] . . . caused [them] prejudice’.”

  • Hargett v. Town of Ticonderoga, 13 N.Y.3d 326 (2009): Reimbursement of Fees After Successful Challenge to Condemnor’s Authority

    Hargett v. Town of Ticonderoga, 13 N.Y.3d 326 (2009)

    Eminent Domain Procedure Law (EDPL) § 702(B) allows a condemnee to be reimbursed for attorney’s fees and costs when they successfully challenge a condemnor’s authority to acquire property in proceedings under EDPL 207(A).

    Summary

    This case addresses whether EDPL § 702(B) provides for the reimbursement of attorney’s fees and costs when a property owner successfully challenges a condemnor’s authority to acquire their property in an EDPL 207(A) proceeding. The Court of Appeals held that it does. In a prior action, a property owner successfully challenged the Town of Ticonderoga’s attempt to condemn her property. She then sought reimbursement for her legal fees under EDPL 702(B). The Supreme Court initially dismissed her claim, relying on a Second Department case. The Appellate Division reversed, disagreeing with the Second Department, and the Court of Appeals affirmed the Appellate Division, holding that EDPL 702(B) allows for reimbursement in such cases, clarifying that condemnees can seek reimbursement for fees incurred during the initial challenge to the condemnation.

    Facts

    The Superintendent of Highways of the Town of Ticonderoga sought to condemn certain real property for purposes not related to his position.
    The property owner challenged the condemnation, arguing that the Superintendent exceeded his authority.
    The Appellate Division agreed with the property owner, determining that the Superintendent’s actions were unauthorized.
    The property owner then commenced a new action in Supreme Court, Essex County, seeking reimbursement of attorney’s fees and costs under EDPL 702(B) for the prior proceeding.

    Procedural History

    The Supreme Court initially dismissed the property owner’s complaint, relying on a Second Department case that interpreted EDPL 702(B) as not providing for reimbursement in such circumstances.
    The Appellate Division modified the Supreme Court’s order, granting the property owner’s motion for summary judgment on the issue of liability and remitting the case to Supreme Court to determine the amount of reimbursable costs. The Appellate Division expressly disagreed with the Second Department case.
    The Appellate Division then granted the Town’s motion for leave to appeal to the Court of Appeals, certifying a question regarding the correctness of the Appellate Division’s decision.

    Issue(s)

    Whether EDPL § 702(B) provides for reimbursement of attorney’s fees and costs when a condemnee successfully challenges a condemnor’s authority to acquire real property in proceedings pursuant to EDPL 207(A).

    Holding

    Yes, because EDPL 702(B) provides for reimbursement to a condemnee who successfully challenges a “proposed acquisition” at the first step of the eminent domain process (EDPL 207) and obtains a judicial determination that the condemnor lacks the authority to pursue the proposed acquisition.

    Court’s Reasoning

    The Court of Appeals reasoned that although the EDPL defines “acquisition” as the vesting of title, the definition of “condemnee” includes those subject to a “proposed acquisition.”
    Since EDPL 207(A) requires a condemnee to challenge the condemnor’s authority within 30 days of the determination, they cannot wait until the vesting proceeding (step two). Thus, EDPL 702(B) must provide reimbursement for those who successfully challenge the proposed acquisition at the first step.
    The court stated, “Given section 207 (A)’s 30-day statute of limitations to seek such judicial review, a condemnee may not sit on its claims until the second step when the condemnor commences a vesting proceeding…Rather, a condemnee must seek judicial review in the Appellate Division practically forthwith—before step two of the process.”
    The Court found no reason why the legislature would allow reimbursement to condemnees successful in Article 4 proceedings, but not to those successful in Article 2 proceedings.
    The Court clarified that the fees and costs that may be reimbursed are limited to those “actually incurred by such condemnee because of the acquisition procedure” (EDPL 702[B]). The Court did not decide whether fees incurred *before* an adverse determination are reimbursable.

  • Matter of Mill Creek Phase 1, 10 N.Y.3d 898 (2008): Interest Rate on Tax Lien Survives Eminent Domain

    Matter of Mill Creek Phase 1 Staten Island Bluebelt System, 10 N.Y.3d 898 (2008)

    The exercise of eminent domain does not automatically reduce the interest rate on a pre-existing tax lien attached to the condemned property; the lienholder is entitled to the contractually agreed upon interest rate until the lien is paid in full.

    Summary

    This case addresses whether the interest rate on a tax lien is reduced when the property subject to the lien is taken by the City of New York through eminent domain. The NYCTL 1998-1 Trust held a tax lien certificate on a property later acquired by the City. The Trust sought to compel the City to pay the lien with an 18% interest rate, as stipulated in the tax lien certificate. The lower courts limited the interest rate to 6% after the City acquired the property. The Court of Appeals reversed, holding that the eminent domain proceeding did not affect the contractual interest rate on the tax lien, and the Trust was entitled to 18% interest until the lien was fully paid.

    Facts

    The City of New York acquired title to a property in Staten Island through eminent domain on July 31, 1998.
    Prior to the acquisition, NYCTL 1998-1 Trust held a tax lien certificate on the property.
    The tax lien certificate specified an 18% interest rate on the tax lien until it was paid in full, as per Administrative Code of City of NY §§ 11-224, 11-319 (b) (6).
    The Trust filed a claim in the condemnation proceeding seeking payment of the lien, including interest at the 18% rate.

    Procedural History

    The Supreme Court granted the Trust’s motion for payment but limited the interest rate to 6% from the date the City acquired title, citing General Municipal Law § 3-a (2).
    The Appellate Division affirmed the Supreme Court’s decision.
    The Court of Appeals granted the Trust’s motion for leave to appeal.

    Issue(s)

    Whether the interest rate on a tax lien remains at the rate specified in the tax lien certificate (18% in this case) after the property subject to the lien is acquired by the City of New York through eminent domain, until the tax lien is fully paid.

    Holding

    Yes, because the exercise of eminent domain does not reduce the interest on a tax lien, and there is no statutory authority to reduce the interest rate below the amount fixed by law; therefore, the Trust is entitled to receive interest at the rate of 18% until the tax lien is fully paid.

    Court’s Reasoning

    The Court of Appeals relied on its prior decision in Matter of City of New York [Hammel Boardwalk Corp.], 288 NY 51 (1942), which established that eminent domain does not automatically reduce the interest rate on a tax lien. The court emphasized that, absent a specific statutory provision allowing for a reduction in interest, the contractual terms of the tax lien remain in effect.
    The court stated that “reduction of interest upon any taxes, assessments and water rents below the amount fixed by law is forbidden (Administrative Code, § 415[1]-8.0, p. 217), and all taxes, assessments and water rents and interest thereon constitute liens until paid (Administrative Code, § 415[1]-7.0, p. 217)”. These sections are now recodified as sections 11-232 and 11-301 respectively.
    The court noted that the NYCTL 1998-1 Trust, as the holder of the tax lien certificate, stands in the shoes of the City and has the same rights as the City, per Administrative Code § 11-332 (a). This includes the right to receive interest at the rate of 18% as originally agreed upon.
    The fact that the Trust filed a claim against the condemnation award, rather than the property itself, did not change the interest rate on the underlying lien.
    Therefore, the interest continued to accrue at 18% from the vesting of title in the City until full payment of the lien.

  • McCurdy v. State, 8 N.Y.3d 231 (2007): Damages for Temporary Easements

    McCurdy v. State, 8 N.Y.3d 231 (2007)

    When the state takes a temporary easement, damages are calculated based on the rental value of the land within the easement plus consequential damages for the unencumbered interior acreage only if access was impossible or the easement demonstrably impeded the property’s highest and best use.

    Summary

    McCurdy owned a vacant parcel of land. The State took a temporary easement for highway reconstruction. McCurdy sought damages for the entire rental value of the property for the easement’s duration, arguing it rendered the property undevelopable. The State argued damages should only cover periods of actual access obstruction. The Court of Appeals held that damages should be based on the rental value of the easement area, plus consequential damages (rental value of remainder) only for periods access was impossible, or if McCurdy proved the easement impeded the property’s highest and best use. Since the State proved the limited obstruction, and McCurdy failed to prove impediment to development, the Court remitted for recalculation of damages accordingly.

    Facts

    McCurdy owned a vacant, unimproved parcel of land with frontage on Montauk Highway. The State permanently appropriated a small slice and acquired a temporary easement for grading during highway reconstruction in 1999. The temporary easement covered the entire highway frontage. The easement reserved to the owner the right to use the property, limited only as necessary for construction and maintenance. McCurdy’s appraiser argued the highest and best use was a medical office building, requiring rezoning and a variance. McCurdy’s dental office was on an adjacent lot.

    Procedural History

    McCurdy sued the State in the Court of Claims. The Court of Claims awarded damages based on the rental value of the entire property for the easement’s duration, relying on Matter of Kadlec v State of New York. The Appellate Division affirmed. The Court of Appeals granted the State leave to appeal.

    Issue(s)

    Whether the proper measure of damages for a temporary easement encumbering a vacant parcel’s entire highway frontage is the rental value of the entire parcel for the easement’s duration, or only for the period of actual obstruction, plus consequential damages if the easement demonstrably impeded the property’s highest and best use.

    Holding

    No, because damages should be awarded based on the rental value of the land encompassed within the temporary easement, plus consequential damages representing the rental value of the unencumbered interior acreage for any period of time when highway access was impossible or the condemnee establishes that the mere existence of the temporary easement did, in fact, impede sale or development of the property for its highest and best use.

    Court’s Reasoning

    The Court relied on Village of Highland Falls v. State of New York, which permitted using hindsight to value a temporary easement. Compensation is not required for a temporary easement if there’s no actual interference with the property owner’s use. Here, the State proved access was only obstructed for 7-10 days. The Court acknowledged the “damage to a property owner caused by uncertainty regarding the condemnor’s intentions,” but the easement’s wording reserved claimant’s right of access. McCurdy failed to show the easement interfered with the property’s marketability or development beyond conjecture. He didn’t apply for rezoning, a highway work permit, or a yard-width variance. The court stated, “If the condemnation award is made after the easement has expired, it makes practical sense to compute the property owner’s actual damages rather than indulging in speculation on the measure of damages claimant could have contemplated at the time of taking.” (quoting Village of Highland Falls). There was no evidence McCurdy attempted to sell or develop the property. Therefore, the Court remitted the case for recalculation of damages based on the limited period of actual obstruction.

  • Lake George Associates v. State, 8 N.Y.3d 475 (2007): Establishing Legal Access After Land Appropriation

    8 N.Y.3d 475 (2007)

    When the state appropriates land for highway improvement and re-establishes access to a public road, an implicit legal right of access can be created through easements and statutory authority, even without a formal deed conveying cross-vehicular access rights.

    Summary

    Lake George Associates sought consequential damages after the State appropriated a portion of its land for highway improvements, altering its direct access to two roads. The State created shared driveways on easements along the property lines, requiring customers to cross neighboring properties to access the plaza from certain directions. The Court of Appeals held that the State’s actions, under Highway Law § 10 (24-d) and the establishment of permanent easements, created an enforceable legal right of access for the claimant, precluding consequential damages. The court reasoned that the Highway Law grants the Commissioner of Transportation the power to re-establish access over neighboring parcels, and the intent to provide such access was clear from the easements’ language and purpose.

    Facts

    Lake George Associates owned a shopping plaza at the corner of Route 9 and Route 149. Prior to 1998, the property had two curb cuts providing direct access to both highways. The State appropriated a frontage strip of claimant’s land to install turning lanes and a sidewalk as part of a highway improvement project. As part of the project, the state also acquired permanent easements over claimant’s land and that of its neighbors, White and Tatko. The state reduced the Route 9 access and eliminated the Route 149 access. The state established new shared driveways on the easements to reestablish access, resulting in indirect access, requiring customers to cross White and Tatko properties.

    Procedural History

    Lake George Associates sued the State for damages. The Court of Claims awarded direct compensation for the appropriated land but denied consequential damages. The Appellate Division affirmed, finding that the permanent easements provided legal access regardless of a formal deed. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the State’s appropriation of land and establishment of permanent easements on neighboring properties, without explicitly granting cross-vehicular access, provides the claimant with an enforceable legal right of access, thereby precluding consequential damages.

    Holding

    Yes, because Highway Law § 10 (24-d) and the language and purpose of the permanent easements, considered together, demonstrate a clear intent to re-establish access to the landowners, thus creating an enforceable legal right of access despite the absence of an explicit conveyance of cross-vehicular access rights.

    Court’s Reasoning

    The Court acknowledged that property owners are entitled to consequential damages when the State’s appropriation results in a loss of the right to enter and exit their property, citing Pollak v. State of New York. However, the Court distinguished the present case, emphasizing that in Pollak, there was no statute analogous to Highway Law § 10 (24-d), which authorizes the Commissioner of Transportation to re-establish private access to a public road when such access is destroyed by highway construction. The Court emphasized that Highway Law § 10 (24-d) vests significant authority in the Commissioner to act in the interests of the state in constructing and improving highways, including the power to reestablish access over neighboring parcels. The court stated that “[t]he easements here, which undeniably served the purpose of reestablishing permanent joint driveways for access to the retail outlets, when viewed in reference to the powers of the Commissioner under Highway Law § 10 (24-d), create a legal right of access to claimant.” The court reasoned that the language employed in creating the easements reflected a clear intent to reestablish access and referencing Highway Law § 10 in the easements gives rise to an enforceable legal right of access, thereby precluding consequential damages.

  • In the Matter of City of New York v. Grand Lafayette Properties LLC, 6 N.Y.3d 535 (2006): Statute of Limitations for Excessive Taking Claims

    6 N.Y.3d 535 (2006)

    A challenge to the merits of a condemnation decision, such as a claim of excessive taking, must be raised in a timely Article 78 proceeding, and cannot be raised for the first time as a defense in a vesting proceeding under Eminent Domain Procedure Law (EDPL) Article 4 after the statute of limitations has expired.

    Summary

    The City of New York initiated eminent domain proceedings to acquire property owned by Grand Lafayette Properties LLC (GLP) for a water system project. GLP argued that the City’s taking of the entire property was excessive. The New York Court of Appeals held that GLP’s challenge was time-barred because GLP failed to file an Article 78 proceeding within four months of the City Planning Commission’s (CPC) approval of the condemnation. The Court determined that challenges to the merits of a condemnation determination must be raised in a timely Article 78 proceeding and not as a defense in a later vesting proceeding.

    Facts

    The City of New York sought to condemn property owned by GLP to construct a shaft for the Third Water Tunnel project. The City filed an application with the Department of City Planning. GLP operated a parking lot on the property. The City used the Uniform Land Use Review Procedure (ULURP), an alternative condemnation procedure, which included public hearings. The City Planning Commission (CPC) approved the City’s request to acquire the property. GLP did not file an Article 78 proceeding challenging the CPC’s resolution. The City then commenced a vesting proceeding to formally acquire title to the property. GLP argued that the taking of the entire property was excessive.

    Procedural History

    The City commenced a vesting proceeding in Supreme Court. GLP raised an excessive taking claim as an affirmative defense and counterclaim. Supreme Court granted the City’s petition and rejected GLP’s excessiveness argument, dismissing GLP’s counterclaims as time-barred. The Appellate Division affirmed. GLP appealed to the New York Court of Appeals.

    Issue(s)

    Whether a landowner can challenge the merits of a condemnation determination, specifically an excessive taking claim, for the first time as a defense in an EDPL Article 4 vesting proceeding, or whether such a challenge must be raised in a timely Article 78 proceeding.

    Holding

    No, because any challenge to the merits underlying the CPC resolution must be raised within the Article 78 context. The statute of limitations began to run when the City Council’s call-up period expired, rendering GLP’s counterclaim untimely.

    Court’s Reasoning

    The Court reasoned that the Eminent Domain Procedure Law (EDPL) requires a condemnor to follow specific procedures before acquiring property. While EDPL 207 provides a 30-day statute of limitations for challenging a determination made under EDPL article 2, the EDPL is silent on the time period for judicial review when a condemnor proceeds under a section 206 exemption (like ULURP). Generally, challenges to administrative agency determinations must be brought via an Article 78 proceeding within four months of the determination becoming final. Here, the CPC’s resolution triggered the statute of limitations, beginning after the City Council’s call-up period expired.

    The Court applied a two-part test to determine when the statute of limitations began to run, asking whether the agency reached a definitive position inflicting actual injury and whether further administrative action could ameliorate the injury. The Court found that the CPC’s determination became final after the City Council’s call-up period expired, making GLP’s subsequent excessive taking claim in the vesting proceeding untimely.

    The Court rejected GLP’s argument that its claim did not accrue until the Mayor approved the acquisition, stating that the Mayor’s approval was not part of the ULURP review process and did not involve substantive analysis of the CPC’s findings. Allowing a challenge in the vesting proceeding would permit a condemnee to untimely contest issues outside the limited scope of an EDPL article 4 vesting proceeding.

    The court emphasized that the purpose of the vesting proceeding is to ensure procedural compliance with the EDPL, not to re-litigate the merits of the condemnation determination. As the court stated: “To hold otherwise would permit a condemnee to untimely contest issues that are outside the limited scope of an EDPL article 4 vesting proceeding.”

  • Westchester Creek Corp. v. New York City School Constr. Auth., 795 N.E.2d 300 (N.Y. 2003): Eminent Domain & Prior Public Use Doctrine

    Westchester Creek Corp. v. New York City School Constr. Auth., 1 N.Y.3d 1, 795 N.E.2d 300 (N.Y. 2003)

    When the legislature has authorized condemnation of city-owned property for a public purpose (here, a school), the prior public use doctrine does not automatically bar condemnation even if the property is already dedicated to another public use (here, urban renewal), provided the condemning authority complies with statutory procedures for notifying the city.

    Summary

    Westchester Creek Corporation (WCC) challenged the School Construction Authority’s (SCA) condemnation of its leasehold interest in city-owned property for the construction of a new school. WCC argued that the SCA lacked statutory authority, that urban renewal (WCC’s existing use) was a superior public use, and that it had a constitutional right to develop the property. The New York Court of Appeals held that the SCA had complied with the statutory requirements for condemning city-owned land and that the prior public use doctrine did not bar the condemnation because the legislature expressly permitted condemnation of city-owned property for school construction, provided certain procedures were followed.

    Facts

    In 1976, the City of New York leased several parcels of land, including Lot 70, to WCC for 90 years under a master lease for urban renewal. In 1987, Lot 70 was severed from the master lease with a similar lease term. WCC developed some of the parcels but only performed minimal work on Lot 70. The SCA sought to condemn Lot 70 to build an elementary/intermediate school to alleviate overcrowding in nearby schools.

    Procedural History

    SCA provided written notice to the Mayor and City Council of its intent to use Lot 70, and the City Council approved the site plan. After a public hearing, the SCA president determined that condemnation was necessary. The Supreme Court entered an order condemning WCC’s leasehold. WCC appealed to the Appellate Division, which confirmed the SCA’s determination. WCC then appealed to the New York Court of Appeals.

    Issue(s)

    Whether the School Construction Authority (SCA) has the statutory authority to condemn city-owned property already dedicated to urban renewal.

    Holding

    Yes, because the Public Authorities Law expressly permits the condemnation of city-owned property, even if it is already dedicated to another public use such as urban renewal, provided the condemning authority follows the statutory procedures for obtaining the city’s consent.

    Court’s Reasoning

    The Court reasoned that while Public Authorities Law § 1728(6) grants the SCA broad condemnation powers, it also requires compliance with § 1729(2) when condemning city property or property in which the city has an interest. This section mandates a written request to the Mayor, who has 30 days to object. The Court found that SCA’s written notice to the Mayor satisfied this requirement. The Court addressed the prior public use doctrine, noting that the Public Authorities Law allows the condemnation of city-owned property if the city, through the Mayor, has the right to object. While the Legislature has called urban redevelopment “a superior public use,” it also stated that “'[t]here can be no higher priority than creating a physical environment in the schools that fosters rather than impedes, the education of our children’” (quoting the New York City School Construction Authority Act). The Court emphasized § 1728(6), which explicitly allows condemnation of city-owned property. As SCA followed the statutory procedures, it was authorized to condemn the property. The court explicitly found that Article XVIII, § 1 of the NY State Constitution gives the legislature the power to establish urban renewal projects, but it does not confer any protection on redevelopers against condemnation. The court emphasized that SCA has unquestioned authority to act to relieve severe school overcrowding.

  • American Pen Corp. v. Metropolitan Transportation Authority, 92 N.Y.2d 154 (1998): Determining Prejudgment Interest Rate in Condemnation Cases

    American Pen Corp. v. Metropolitan Transportation Authority, 92 N.Y.2d 154 (1998)

    In condemnation proceedings involving the Metropolitan Transportation Authority (MTA), the applicable prejudgment interest rate is presumptively 9%, as provided by Unconsolidated Laws § 2501, unless evidence demonstrates that this rate would result in a denial of just compensation or unfairness.

    Summary

    This case addresses the appropriate prejudgment interest rate to be applied when the Metropolitan Transportation Authority (MTA) condemns property. American Pen Corp. argued for a 9% rate under Unconsolidated Laws § 2501, while the MTA contended for a 4% rate under Public Authorities Law § 1276(5). The Court of Appeals held that the 9% rate applied, reasoning that the 4% rate in Public Authorities Law § 1276(5) primarily concerns actions for damages, injuries, or destruction of property, not constitutional claims for just compensation in eminent domain cases. The court emphasized the importance of just compensation, referencing legislative intent to avoid penalizing condemnees.

    Facts

    In June 1988, the MTA condemned easements across American Pen’s property. The MTA initially offered $120,000 as just compensation, which American Pen rejected. American Pen subsequently filed a claim alleging damages of $1,323,000 due to the condemnation. The Supreme Court accepted American Pen’s valuation and ordered the MTA to pay an additional $420,000 plus interest. A dispute arose regarding the applicable prejudgment interest rate, with American Pen seeking 9% and the MTA arguing for 4%.

    Procedural History

    The Supreme Court ruled that the MTA was bound by the 9% interest rate. The MTA appealed, alleging that both the award and the interest rate were excessive. The parties then settled the case for $400,000, reducing the principal amount of the award. The Appellate Division modified the Supreme Court’s order, concluding that prejudgment interest could be awarded at a rate as high as 9%, ordering a hearing to determine if 9% was reasonable. The MTA appealed to the Court of Appeals, challenging the Appellate Division’s decision on the prejudgment interest rate.

    Issue(s)

    Whether the prejudgment interest rate on property condemned by the Metropolitan Transportation Authority (MTA) is 9%, as provided by McKinney’s Unconsolidated Laws of NY § 2501, or 4%, as provided by Public Authorities Law § 1276(5)?

    Holding

    Yes, the prejudgment interest rate is 9% because Unconsolidated Laws § 2501 applies to claims for just compensation against public corporations like the MTA, and Public Authorities Law § 1276(5) is primarily intended for actions involving damages, injuries, or destruction of property.

    Court’s Reasoning

    The Court reasoned that while Public Authorities Law § 1276(5) sets a 4% interest rate for judgments against the MTA, this provision pertains to actions for “damages, for injuries to real or personal property or for the destruction thereof,” rather than constitutional claims for just compensation. The right to just compensation stems directly from the New York State Constitution, not from Public Authorities Law § 1276. The court highlighted the legislative history of Unconsolidated Laws § 2501, noting that its amendment to raise the interest rate to 9% was intended to address the “gross injustice and inequity” suffered by claimants due to delayed compensation. The Court also emphasized that Unconsolidated Laws § 2501 mirrors the statute applicable in condemnation proceedings against the State, promoting parity and aligning with the EDPL’s goals of ensuring just compensation and equal treatment for all property owners. The court stated, “The amount of interest necessary to bring the payment into accord with the constitutional requirement is a judicial question, although the interest rate fixed by the Legislature will be deemed presumptively reasonable.”

  • Scoglio v. County of Suffolk, 85 N.Y.2d 709 (1995): Abutting Landowner’s Right to Purchase Surplus Highway Land

    Scoglio v. County of Suffolk, 85 N.Y.2d 709 (1995)

    Highway Law § 125 grants an abutting landowner the right to purchase surplus property acquired by the county for highway purposes when the sale will give the owner frontage on the new highway, but does not compel the county to sell the property.

    Summary

    Scoglio, an owner of land abutting County Road 96, sought to prevent Suffolk County from selling a parcel of land, formerly part of the roadbed, to anyone other than him after the road was rerouted. The New York Court of Appeals held that Highway Law § 125 requires the county, if it chooses to sell the surplus land, to offer it to the abutting landowner (Scoglio) because the sale would provide him with frontage on the new highway. However, the court clarified that the statute does not mandate the county to sell the land at all, leaving that decision to the county’s discretion. The statute aims to protect the rights of abutting landowners.

    Facts

    Scoglio owned land in West Babylon abutting County Road 96. Suffolk County acquired land, including some abutting Scoglio’s property, to reroute the road. The rerouting created a surplus parcel between Scoglio’s property and the new road, which had been part of the old roadbed. Scoglio leased this surplus parcel from the county. The county then decided to sell the parcel at public auction.

    Procedural History

    Scoglio filed a CPLR article 78 proceeding to prevent the sale to anyone else and compel the county to convey the parcel to him. The Supreme Court dismissed the petition. The Appellate Division modified, prohibiting the sale to anyone other than Scoglio. The County appealed to the New York Court of Appeals.

    Issue(s)

    Whether Highway Law § 125 requires a county to sell surplus property acquired for highway purposes to an abutting landowner when the sale would give that owner frontage on the new highway, and whether the statute compels the county to sell the property at all.

    Holding

    Yes, but only if the county decides to sell the property at all. Highway Law § 125 requires that if the County elects to sell the surplus parcel, it must sell it to the abutting landowner (Scoglio) because the statute’s evident intent is to protect abutting landowners’ rights. No, because the statute is permissive, stating the county “may” lease or convey surplus property, but is not required to do so.

    Court’s Reasoning

    The Court of Appeals based its reasoning on the language and intent of Highway Law § 125. The court emphasized that the statute aims to protect the traditional rights of abutting landowners, including easements of light, air, and access. The court stated, “When respondent acquired the parcel in question solely for highway purposes, it became part of the right-of-way of the new highway, and thus remained burdened with the usual rights, including access, of the abutting owner.” Requiring the sale to the abutting owner preserves these preexisting rights. The court rejected the County’s argument that the statute only provides a right of first refusal, noting that the Legislature specifically created a right of first refusal for certain lands in Wayne County, suggesting that a broader right was intended in the general statute. The Court also rejected the argument that Scoglio needed to demonstrate compensable consequential damages to benefit from the statute, because this would render other parts of the law meaningless. The Court clarified that the decision to sell the property remains at the County’s discretion. As the Court stated, “The statute provides only that the County ‘may’ lease or convey surplus property deemed unnecessary for highway purposes in the manner provided, and cannot be read to require the County to do so.”